Can the IRS Take My Property? What You Need to Know About Asset Seizure

by Renee Lawson | Jan 27, 2025 | Tax Preparation, Tax Resolution

Dealing with tax debt can be a stressful experience, especially when the IRS begins to take aggressive collection actions. One of the most concerning possibilities is the seizure of your assets.

If you owe significant back taxes and have not made arrangements to pay, you may wonder: Can the IRS really take my property?

The answer is yes, but there are safeguards and options available to help you avoid this situation. In this article, we’ll explain how asset seizure works, the process the IRS follows, and the steps you can take to protect your assets and resolve your tax debt before it escalates to this point.

Understanding IRS Asset Seizure

The IRS has the legal right to seize property in order to satisfy unpaid tax debt, but they do not do so lightly. Asset seizure is one of the last steps the IRS takes after other collection efforts have failed.

Typically, the IRS will first issue a series of notices demanding payment. If you fail to respond or make arrangements to pay, then they may begin more aggressive actions, such as filing liens, garnishing wages, or levying your assets.

Types of Assets the IRS Can Seize

The IRS can seize various types of assets, including:

1. Bank Accounts
   If you have unpaid taxes and your case reaches the point of asset seizure, the IRS can levy your bank accounts, meaning they can take money directly from your accounts to cover your debt. This can leave you with little access to funds for everyday expenses.
2. Wages
   The IRS can also garnish your wages, taking a portion of your paycheck directly from your employer to satisfy your tax debt. This can significantly impact your ability to meet your financial obligations.
3. Real Estate (Homes)
   In some cases, the IRS can place a tax lien on your property, which means they have a legal claim on your property until your debt is paid. If you continue to ignore the debt, the IRS may initiate the seizure of your home or other real estate assets.
4. Vehicles
   The IRS can seize vehicles, including cars, trucks, and boats, to cover unpaid taxes. After seizing the vehicle, they will sell it at auction to recoup some of the debt.
5. Other Personal Property
   The IRS may also seize other valuable personal property, such as jewelry, collectibles, or business assets, to help satisfy the tax debt.

How the IRS Seizes Assets

Asset seizure is not an immediate process. The IRS must follow specific procedures before seizing any property. Here’s a generic outline of the typical process:

1. Notice of Debt
   If you owe taxes and have not made arrangements to pay, the IRS will send you a series of notices warning you of the outstanding debt. These notices typically start with a simple request for payment but escalate to more formal warnings, such as the Final Notice of Intent to Levy. If you receive this notice, the IRS is informing you that they intend to take collection actions.
2. Levy and Seizure
   If you do not respond or pay the taxes owed, the IRS may proceed with a levy, which allows them to seize assets. The IRS is required to send a final notice of levy at least 30 days before they take action. This is when the IRS will begin contacting your bank or employer to start garnishing your wages or bank accounts.
3. Seizing Property
   If the IRS is unable to recover sufficient funds through levies or garnishments, they may move to seize your assets. Before taking property, the IRS will usually notify you in writing. They will also send an official notice of seizure if they plan to auction your property.
4. Auctioning Your Property
   After the IRS seizes your assets, they will sell them at an auction to recover the unpaid tax debt. The proceeds from the sale are used to cover the amount you owe. If the sale exceeds your tax debt, you may be entitled to a refund.

How to Prevent IRS Asset Seizure

The risk of asset seizure can be avoided by addressing your tax debt before it reaches this stage. Here are steps you can take to protect your property and resolve your tax issues:

1. File and Pay on Time
   The best way to avoid asset seizure is to file your tax returns on time and pay the taxes you owe. If you are unable to pay the full amount, the IRS offers options like installment agreements and Offer in Compromise (OIC) to make your debt more manageable.
2. Set Up a Payment Plan
   If you cannot afford to pay your tax debt all at once, you can set up a payment plan with the IRS. An installment agreement allows you to make monthly payments toward your tax debt over time. This arrangement can help you avoid collection actions, including asset seizure, as long as you keep up with your payments.
3. Negotiate an Offer in Compromise
   If you owe a substantial amount of taxes and cannot pay in full, an Offer in Compromise (OIC) might be an option. This program allows you to settle your tax debt for less than the full amount owed. However, qualifying for an OIC can be challenging, and the IRS carefully reviews your financial situation to determine if you qualify. A tax relief professional can help you navigate this process and increase your chances of success.
4. File for Currently Not Collectible Status
   If you are facing financial hardship and cannot afford to pay your taxes, you may qualify for Currently Not Collectible (CNC) status. This status temporarily halts IRS collection actions, including asset seizures. While your debt remains, CNC status gives you a break and allows you to improve your financial situation.
5. Appeal the Seizure
   If the IRS has already issued a notice of seizure, you have the right to appeal. If you can demonstrate that the seizure would cause undue financial hardship or that you were not properly notified, you may be able to halt the seizure process. Working with a tax relief professional can help ensure that your appeal is properly filed.

How a Tax Relief Professional Can Help

If you are facing the threat of IRS asset seizure, a tax relief professional can be your advocate in negotiating with the IRS and finding a solution. Here’s how a tax resolution expert can help:

• Negotiation: A tax relief professional can help you negotiate a payment plan or offer in compromise with the IRS, preventing the need for asset seizure.
• Representation: They can represent you in IRS hearings or appeals and communicate with the IRS on your behalf, taking the stress out of the process.
• Guidance: Tax resolution professionals will guide you through the steps to apply for Currently Not Collectible status or to challenge the seizure if necessary.
• Prevention: A tax relief expert can help you take the necessary steps to resolve your debt early, reducing the chances of escalation to asset seizure.

Take Action Today

If you’re at risk of losing your assets to the IRS, it’s important to take immediate action. Ignoring the situation will only make things worse, leading to asset seizure and financial hardship.

By working with tax relief professionals like the ones at Action Tax Relief, you can take steps to resolve your tax debt, protect your property, and avoid further collection actions.

Reach out to Action Tax Relief today at 937-268-2737 to discuss your options and begin the process of safeguarding your assets and your financial future.

How to Start the New Year Off Right to Resolve Tax Debt

by Renee Lawson | Jan 6, 2025 | Tax Preparation, Tax Resolution

The new year is here, and with it comes a fresh start for everyone—especially if you’re facing tax debt. If you owe $10,000 or more in back taxes, the beginning of the year is a great time to take a step back, assess your tax situation, and develop a plan to resolve your debt.

Ignoring tax issues may seem like an easier option, but the longer you wait, the more penalties and interest can add up. In this article, we’ll explain how starting the year with a clear plan in place can help you regain control of your finances and reduce the chances of your tax debt escalating.

Assess Your Current Tax Situation

If you’re carrying tax debt into the new year, the first step is to fully understand the extent of the debt. This includes knowing how much exactly you owe, any interest or penalties that have accumulated, and whether any collection actions have been taken against you by the IRS. The IRS may have already issued you warnings or collection notices, or they may be gearing up to take more aggressive steps if you don’t take any action.

Start by gathering all of your tax documents, including any IRS notices you’ve received, tax returns from previous years, and any statements regarding unpaid taxes. A clear understanding of your current tax status will help you know where you stand and what needs to be done.

Address Your Tax Debt Early

One of the most common mistakes taxpayers make is waiting too long to address their tax debt. The longer you ignore the issue, the higher the chances are of IRS collection actions like wage garnishments, bank levies, or tax liens.

These actions can significantly damage your financial situation and credit score, making it even harder to get back on track. Now that it’s a new year, you have a fresh opportunity to take control!

By addressing your tax debt early in the year, you give yourself more time to work with the IRS on finding a manageable solution. This could include setting up a payment plan, requesting penalty relief, or negotiating a settlement through programs like the Offer in Compromise (OIC).

Explore Your Tax Resolution Options

When it comes to resolving tax debt, there are several options available depending on your financial situation. Here are a few of the most common tax resolution options:

1. Installment Agreements

If you can’t pay your tax debt in full right away, the IRS allows you to set up an installment agreement. This is a monthly payment plan that spreads out the cost of your debt over time, often making it more manageable. The IRS offers different types of payment plans, including short-term and long-term options, depending on how much you owe and your ability to pay.

2. Offer in Compromise (OIC)

If you owe a substantial amount in taxes and are unable to pay it all, you may be eligible for an Offer in Compromise. This program allows you to settle your tax debt for less than the total amount owed, but qualifying for it can be challenging. The IRS looks at your income, expenses, and assets to determine whether you’re eligible. A tax resolution professional can help you assess your eligibility and guide you through the application process.

3. Penalty Abatement

In some cases, the IRS will reduce or eliminate penalties if there is reasonable cause for your failure to pay or file your taxes. If you can show that your inability to pay was due to circumstances beyond your control, such as medical emergencies or a job loss, you may be able to have penalties reduced or waived. A tax relief professional can help you present your case to the IRS and increase your chances of having penalties removed.

4. Currently Not Collectible Status

If you are facing significant financial hardship, the IRS may place your account in Currently Not Collectible (CNC) status. This means that the IRS will temporarily stop all collection activities, such as garnishments or levies, for a set period. While this status does not completely eliminate your debt, it provides some immediate relief and gives you a little more time to stabilize your finances before addressing the debt again.

Seek Professional Help to Navigate the Process

The process to resolving tax debt can be complicated, and dealing with the IRS on your own can be overwhelming. Tax relief professionals like the ones at Action Tax Relief can help you navigate the various programs available to you and negotiate with the IRS on your behalf. They can also provide expert advice on the best strategy based on your unique financial situation.

Since they handle all the communication with the IRS, you don’t have to deal with the stress of trying to manage the situation alone. They will help ensure that you meet all deadlines, file all necessary paperwork, and protect your rights as a taxpayer.

Planning for the Future

Once your current tax debt is resolved, it’s important to implement strategies to avoid future tax problems. A tax relief professional can help you with tax planning to ensure you stay on track with your obligations moving forward. This may include budgeting for future taxes, keeping better records of your income and expenses, and making timely quarterly tax payments to avoid underpayment penalties.

Starting the year with a clear tax resolution plan can set you up for financial success in the months ahead. Addressing your back taxes now can reduce the stress and burden of dealing with the IRS later on, and it allows you to move forward with a clean slate.

Take Action Now

If you owe $10,000 or more in taxes, don’t wait until the IRS escalates collection actions. Start the year off right by seeking professional help to resolve your tax debt and find a manageable solution.

Tax relief professionals like the ones at Action Tax Reliefcan help you understand your options and work with the IRS to find the best outcome for your financial situation.

The sooner you take action, the sooner you can get back to focusing on your life and your business without the looming threat of IRS actions. Contact Action Tax Relief today at 937-268-2737 to discuss your options and take the first step toward resolving your tax debt.

When to Reach Out to a Tax Resolution Professional

by Renee Lawson | Dec 16, 2024 | Tax Preparation, Tax Resolution

Navigating the world of taxes can be an overly complex and overwhelming experience, especially if you find yourself in a situation where you owe back taxes or have the IRS breathing down your back.

If you’re feeling stressed or uncertain about your tax obligations, it’s crucial to know when it’s time to seek help from a tax resolution professional. Understanding the signs that indicate you need expert assistance can make a world of difference in your financial well-being.

Signs You Should Contact a Tax Resolution Professional

1. Receiving IRS Notices and Letters

One of the clearest signs that it’s time to seek help is when you receive a notice or letter from the IRS. Whether it’s a demand for payment, a notice of audit, or a letter indicating discrepancies in your tax filings, it’s important not to ignore these communications. A tax resolution professional can help you understand the implications of these notices and guide you on how to respond appropriately.

• Accumulating Tax Debt

If you owe $10,000 or more in back taxes, it’s time to consult with a tax resolution professional. Accumulating tax debt can lead to severe consequences, such as wage garnishments, bank levies, and even tax liens on your property. A professional can help you go over your options to manage and resolve your looming tax debt, and potentially even reduce your overall liability.

• Fear of Audits or Current Audit Procedures

The thought of an IRS audit can be a little scary (maybe a lot scary), and if you’re feeling anxious about the possibility of an audit, it may be time to reach out for assistance. If you are currently undergoing an audit, a tax resolution professional can represent you and help guide you through the entire audit process, making sure that your rights are protected and that you have the right support that you need.

• Inability to Pay Your Taxes

If you find yourself in a situation where you cannot pay your taxes in full, don’t panic. Instead, consult with a tax relief professional. They can help you understand your options, such as setting up a payment plan or applying for an Offer in Compromise, which allows you to settle your tax debt for less than the total amount owed.

• Multiple Years of Unfiled Tax Returns

Failing to file tax returns for multiple years can lead to serious consequences, including increased penalties and legal repercussions. If you’re behind on filing your returns, it’s essential to seek professional help as soon as possible. Tax resolution experts can assist you in catching up on your filings, ensuring that you comply with tax laws and minimize potential penalties.

• Stress and Anxiety Over Tax Issues

If you’re feeling overwhelmed by your tax situation, it’s a strong indication that you could benefit from professional assistance. Dealing with tax debt, notices, or audits can create significant stress, impacting your overall well-being. A tax resolution professional can help take the weight off of your shoulders, offering you peace of mind and a clear path forward.

• Lack of Knowledge about Tax Laws and Regulations

If you find tax laws confusing or feel unsure about your rights and obligations as a taxpayer, reaching out to a professional is a wise choice. Tax resolution experts have in-depth knowledge of tax laws and can provide clarity on your specific situation, helping you make informed decisions based on your needs.

How a Tax Resolution Professional Can Help

Once you’ve recognized the signs that indicate it’s time to seek help, here’s how a tax resolution professional can help you moving forward:

• Expert Negotiation: Tax relief professionals are skilled negotiators when it comes to working with the IRS and you want them on your side. They understand the intricacies of tax law and can advocate for you, aiming to secure as favorable an outcome as possible.
• Customized Solutions: Each taxpayer’s situation is unique, and having the right professionals on your team can help you develop tailored strategies based on your specific circumstances. Whether it’s negotiating a settlement or setting up a payment plan, they can provide personalized solutions to fit whatever your needs are.
• Comprehensive Support: From handling communications with the IRS to representing you during audits, tax resolution professionals are there to offer you comprehensive support throughout the entire process. You’re never alone, and their guidance alone will save you time and stress.
• Long-Term Financial Planning: Beyond immediate tax relief, these professionals can assist you in developing strategies to manage your finances and avoid future tax issues, laying the groundwork for a more secure financial future and setting you up for success.

Taking the Next Step

Recognizing the signs that it’s time to reach out to a tax resolution professional is the first step toward taking back control of your financial situation. Don’t let stress and uncertainty dictate your life – take proactive action that can pave the way to resolving the issue once and for all.

If you’re facing tax challenges, whether it’s unfiled returns, overwhelming debt, or the fear of an audit, don’t hesitate to contact our team at Action Tax Relief.

We’re here to help you navigate the complexities of tax resolution and work towards a solution that will work best for you. Your financial peace of mind is just a call away 937-268-2737.

1099 Workers in Focus: How to Protect Yourself from IRS Scrutiny

by Renee Lawson | Dec 13, 2024 | Tax Preparation, Tax Resolution

As a 1099 worker, navigating the complexities of freelance or contract work can be both rewarding and challenging. While the flexibility of self-employment is appealing, it also comes with unique tax responsibilities that can lead to potential scrutiny from the IRS.

If you’ve received a notice from the IRS claiming you owe $10,000 or more or you are concerned about your tax obligations, contact our firm immediately for a consultation  www.actiontaxrelief.com.

To help avoid potential IRS in the future, this article will explore your tax responsibilities as a 1099 worker and provide strategies to help you minimize the risk of audits.

Understanding Your Tax Responsibilities

As a 1099 worker, you are classified as self-employed, which means you have specific tax obligations that differ from traditional employees. Here are the key responsibilities you need to be aware of:

1. Accurate Reporting of Income: All income earned as a 1099 worker must be reported on your tax return, regardless of how small the amount was or whether you received a 1099 form from your client. The IRS requires comprehensive reporting of all earnings, and not submitting everything can result in significant penalties that could otherwise be avoided.
2. Quarterly Estimated Tax Payments: Unlike employees, taxes are not withheld from your payments as a 1099 worker. You are responsible for making estimated tax payments quarterly. Staying on top of these payments is crucial to avoid underpayment penalties and interest. This often gets overlooked, but coming up with your own system to make these payments will save you a major headache when it comes to filing your tax return.
3. Detailed Record-Keeping: Maintaining meticulous records is essential for accurately reporting your income and expenses. This includes tracking your invoices, saving any and all receipts, and documenting your business-related costs. Good record-keeping not only simplifies your tax filing but also provides the supporting documentation in case of an audit.
4. Deductions and Business Expenses: As a self-employed individual, you get the opportunity to deduct legitimate business expenses that can lower your taxable income. However, these deductions have to be extremely well-documented and should directly relate to your business operations. The IRS is known to closely scrutinize excessive or questionable deductions, so it’s important to stay within the bounds of what is legal.

Strategies to Minimize IRS Scrutiny

Now that you understand your tax responsibilities, here are some effective strategies to help you minimize the risk of IRS scrutiny:

1. File Your Taxes Accurately and Timely: Tax day is not something most people look forward to, and many people put it off as long as they can. As a 1099 worker, it’s even more important to make sure that your tax return is accurate and submitted by the deadline. Take the time to double-check your figures to avoid any errors that could potentially lead to an audit.
2. Track Your Earnings: One of the biggest red flags for IRS auditors is unreported or misreported income. Utilize accounting tools or payment platforms that help you track your earnings effectively. This practice not only aids in accurate reporting but also ensures that you have the necessary documentation readily available.
3. Request 1099 Forms from Clients: If you work with multiple clients, request 1099 forms from each one. This helps you know that all your income is accounted for and provides a clear record of what you’ve earned.
4. Make Timely Estimated Payments: Keep track of your quarterly estimated tax payments and ensure that they are made on time. Set reminders for yourself and put money aside periodically to help prevent any missed payments, which could lead to penalties.
5. Be Aware of Common Audit Triggers: Get familiar with factors that might trigger an audit, such as large deductions relative to your income or discrepancies between what you report as income and what your clients report to the IRS. Understanding these triggers can help you avoid the common pitfalls.
6. Communicate Promptly with the IRS: If you receive any notices or inquiries from the IRS, respond promptly and professionally. Ignoring their communications can lead to further complications. If you’re uncertain about how to respond, contact our office 937-268-2737 and we can help you.

Moving Forward with Confidence

As a 1099 worker, it is so important to understand your tax responsibilities and take proactive measures to avoid the IRS’s scrutiny. By staying organized, filing your taxes accurately, and being aware of common mistakes that many freelance workers make, you can reduce your risk of audits and penalties.

If you find yourself struggling with tax issues or facing IRS scrutiny, remember that you don’t have to face it alone. Tax resolution professionals like the ones at  Action Tax Relief are here to help you navigate all the complexities of tax regulations and work toward a favorable resolution. Don’t hesitate to reach out to us at 937-268-2737 for support—your peace of mind is worth it.

Tips for Gig Workers to Avoid IRS Garnishments

by Renee Lawson | Nov 4, 2024 | Tax Preparation, Tax Resolution

As a gig worker, you get to enjoy the flexibility of setting your own schedule, choosing what you work on and who you work with, but with that independence comes the responsibility of managing your taxes.

In fact, there are a lot of gig workers that are surprised to learn that if they don’t pay their taxes, they may be at risk of IRS wage garnishment, an action that can severely disrupt your income and finances.

In this article, we will review how IRS garnishment works, what steps you can take to avoid it, and how tax relief professionals like the ones at Liberty Accounting Plus can help you prevent or stop garnishments if they’ve already begun.

What Is IRS Wage Garnishment?

IRS wage garnishment occurs when the government takes a portion of what you earn to settle unpaid tax debt. For example, if you owe the IRS and do not address the debt, they can take action to collect the money you owe by garnishing your wages.

For gig workers, this can mean having a percentage of your income withheld directly from the payments you receive for your work, which can cause immediate financial strain and snowball into many other issues.

While it’s more common for employees to have taxes withheld automatically, self-employed individuals, like gig workers, are still very much responsible for paying their taxes, including self-employment taxes, throughout the year. If you fail to make estimated tax payments or underreport your income, the IRS may begin the garnishment process.

How Wage Garnishment Happens

Wage garnishment is not an immediate action – it’s a process that builds up over time. The first step involves the IRS sending notices to inform you of the tax debt and giving you the chance to settle the amount owed.

If these notices are ignored, the IRS may issue a Final Notice of Intent to Levy, which is your final warning that they intend to garnish your wages.

It’s always important not to ignore any communication from the IRS. In this scenario, once the Final Notice of Intent to Levy is issued, the IRS can begin the garnishment process.

For gig workers, this usually means that the IRS will contact your clients or payment processors to withhold a portion of your earnings. This can make it difficult to access your income, as the money is withheld directly before you receive it.

Steps to Avoid IRS Garnishment

The best way to avoid wage garnishment is to stay proactive and address your tax obligations early. Here are a few key actions you can take to ensure you don’t find yourself facing garnishment:

Paying Estimated Taxes on Time

As a self-employed individual, you are required to pay self-employment taxes in addition to regular income taxes. The IRS expects you to pay estimated taxes on a quarterly basis. If you miss these payments, the IRS can assess penalties and, eventually, initiate garnishment. To avoid this, make sure to set aside money throughout the year and pay your taxes quarterly. Keeping track of your income and setting aside funds can make quarterly payments easier to handle.

File Your Tax Return On Time

Even if you can’t pay the full amount you owe, filing your taxes on time is crucial. If you fail to file, the IRS can assess additional penalties, making the situation worse.

Filing on time, even if you’re unable to pay, shows the IRS that you’re making an effort to comply with the law, which may help you in negotiating a payment plan or other resolution options.

Set Up a Payment Plan

If you can’t pay your tax debt in full, it’s important to explore payment options. The IRS offers installment agreements that allow you to pay your debt in manageable monthly payments. Setting up a payment plan before garnishment begins can protect your income and prevent further collection actions. Make sure to stay current with your payments to avoid any additional penalties or collection efforts.

Keep Track of All Income and Expenses

It’s essential to keep accurate records of your income, especially as a gig worker. The IRS will only garnish your wages if they know you owe taxes, so the more organized you are, the easier it is to comply with tax regulations.

By staying organized and maintaining detailed financial records, you reduce the chance of any issues found in your filings that could lead to back taxes and, eventually, garnishment.

What to Do if You Receive a Garnishment Notice

If you’ve already received a garnishment notice, don’t panic. While garnishment is a serious matter, it is not the end of the road. There are steps you can take to resolve the issue before the garnishment takes effect.

First, contact the IRS immediately. Ignoring the notice will only make matters worse. You have the right to appeal the garnishment, and in some cases, the IRS may be willing to halt the garnishment if you show that it would cause undue financial hardship. Additionally, you may be able to request a payment plan or even an Offer in Compromise, which could reduce the total amount you owe.

However, it’s important to note that negotiating with the IRS on your own may be an uphill battle, and that’s where a tax relief professional can help. They specialize in negotiating with the IRS, and they can advocate on your behalf to stop garnishments and set up a manageable solution. They can also help you explore other options, such as applying for Currently Not Collectible status, which temporarily suspends collection actions.

How Tax Relief Professionals Can Help

Tax relief professionals are experts at navigating the complexities of IRS tax laws and can help you prevent or stop wage garnishment. If you’re already facing garnishment, a tax relief professional can:

• Negotiate with the IRS – A tax relief professional will work with the IRS to negotiate a payment plan, reduce penalties, or potentially settle your tax debt for less than you owe (Offer in Compromise).
• Stop Garnishments – They can file appeals to stop garnishment actions and help you secure more favorable terms.
• Represent You in IRS Communications – A professional can handle all communications with the IRS on your behalf, taking the stress off you and ensuring that the process moves smoothly.
• Offer Long-Term Solutions – Beyond just stopping garnishments, tax relief professionals can help you avoid future tax issues by providing advice on managing your tax responsibilities and avoiding pitfalls in the future.

As a gig worker, it’s essential to understand the potential risks of IRS garnishment and take steps to avoid it. By staying on top of your estimated tax payments, filing your returns on time, and keeping accurate records, you can prevent tax issues before they arise.

If you’re already facing a garnishment notice, call the tax relief professionals at Action Tax Relief at 937-268-2737 can provide you with the expertise and support you need to resolve the situation and protect your income.

If you’re struggling with tax debt or facing IRS garnishment, don’t hesitate to reach out to our office. With our assistance, you can take control of your tax situation and avoid the financial strain of garnishments.